Sifca to Boost West Africa's Palm-Oil Output as Demand Grows

(Bloomberg) -- Ivory Coast's biggest oil-palm grower plans to meet rising demand for the product in Africa by increasing the capacity of its refineries and pushing output to at least 1 million tons a year by 2022.

“Our population is growing rapidly, consumption increases,” Alassane Doumbia, chief executive officer of Sifca of Ivory Coast, said in an interview in the commercial capital, Abidjan. “There's a real need for more cooking oil. We need to aim higher.”

Sifca owns Africa's biggest palm-oil refinery, based in Abidjan, and has a 38-percent stake in a refinery in neighboring Ghana that's operated by Wilmar International Ltd. The plants have a combined annual capacity of 750,000 tons, Doumbia said.

Founded in 1964, Sifca is the country's biggest private employer with about 29,000 workers. Doumbia was named CEO last year after serving as vice president of the group since 2013. He's the adoptive son of a previous CEO, Yves Lambelin, who ran the company for almost three decades until he was kidnapped from a hotel and murdered during a battle for control of Abidjan that followed a 2010 election dispute.

Rising Incomes

Consumption of palm oil in West Africa, where it's already widely used in soups and sauces, and in East Africa will continue to climb, mainly because of rising income levels and strong population growth, according to BMI Research. Consumption in Cameroon, Ghana and Ivory Coast will probably expand between 5 and 7 percent annually in the next four years.

Sifca is the biggest exporter of edible oil in the region, shipping to Senegal, Burkina Faso, Mali, Niger and Mauritania. Wilmar International Ltd. and Olam International Ltd. each have a 13.5-percent stake in the company.

Most of Sifca's crude palm-oil production comes from its plantations in Ivory Coast. The company owns more than 40,000 hectares (99,000 acres) of land, while it also buys from independent farmers who're spread out on 110,000 hectares. There are plans to improve yields on existing plantations by helping producers plant new trees and use more fertilizers, Doumbia said.

A recently developed plantation in neighboring Liberia may already produce 10,000 tons of palm oil this year, Doumbia said. The company is also exploring peanut-oil production in Senegal, he said.

Meanwhile, Sifca wants to expand its palm-oil business in Nigeria, and there are talks underway to acquire 10,000 hectares of land in Nigeria, he said.

“We've held back the project in Nigeria a bit because the prices were low, but we gave it a go again recently,” he said. “We need to structure the project and find a partner. We may stick to a plantation or go as far as building a refinery.”

To contact the reporter on this story: Olivier Monnier in Abidjan at omonnier@bloomberg.net.

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net, Pauline Bax, Rene Vollgraaff